We’ve all done it. We’ve all had that relative that wanted to use your services but didn’t quite have the means to afford you. So what do you do? Or maybe you haven’t experienced that first hand but you’ve had a friend who just needed a little help in the early days to “make it” in the long run. It’s a common temptation for compassionate people to bend the rules for those closest to them, but it can be the death of your business. Have you ever stopped to think that if anyone should want to see you succeed it would be your family and friends? If anyone should pay full price they shouldn’t they be first in line?
Perhaps this short paragraph was a wakeup call for you but you’re asking yourself… “ok, now what? What do I do when someone asks for a discount?”.[Tweet “”Never make a business decision based on guilt.” – @lashondambrown”]
After years in business I think I’ve stumbled across some strategies for navigating the treacherous waters of friends and family discounts and I would be more than happy to share my findings. Here are my top 5 tips for navigating discounts in business.
- Do not lower the price without lowering the value. If you simply apply discounts when people ask and don’t lower the value, your pricing becomes arbitrary. You have to be consistent with your pricing even when you’re working with friends so they know exactly what to say when passing you referrals.
- Do not feel obligated into giving discounts. If your family and friends attempt to manipulate you by making you feel guilty for sticking by your pricing, that is a giant red flag. This is not a good business move for you. Never make a business decision based on guilt.
- Do not prioritize the work if you lower your price. Above all, you cannot prioritize work for family and friends if they are not willing to pay full price. Full price implies full attention. If they can’t bring that to the table, give them a deadline that’s twice as long as what you would normally tell a client. This allows you to take your time without feeling pressured to give them special attention.
- Make them responsible for keeping things on task. Paid clients pay to be able to “set it and forget it” but our love ones should not receive that perk because we share a last name. Give them tasks that they must complete to keep the project on task. Make an effort to keep them accountable. Discounts should be a two way street. Do not lower a price without raising the level of responsibility on the other side of the business relationship.
- Find a non-profit that aligns with your beliefs as an outlet. Sometimes people go into business with family because they believe it will be fulfilling experience. It’s vital that you realize business has the power to tear family and friends apart. Just imagine Thanksgiving dinner if you’d hired a sibling and had to let them go. Talk about awkward. Choosing a non-profit to support is the perfect way to do pro-bono or discounted work in a productive way. It helps them to grow and it keeps your family life in tact.